By Evan Hackel
You’re eager to increase the number of your franchise locations. That’s exciting. Congratulations!
But are you sure you are really ready? Here are 10 critical factors to keep in mind to help you make the best decision.
1. System Readiness
Before adding more units, ask whether the current system is strong enough to replicate.
- Are operations truly dialed in? If franchisees are improvising or struggling, expansion magnifies the problem.
- Is the brand playbook complete and proven? Training, manuals, marketing, tech, and support must be turnkey.
- Is unit-level profitability consistent? If existing franchisees aren’t hitting targets, adding more locations only spreads dissatisfaction.
2. Franchisee Support Capacity
Growth requires infrastructure.
- Can your support team handle more units? Field consultants, onboarding, marketing support, compliance monitoring.
- Do you have scalable technology? POS, CRM, reporting, and communication systems must support a larger network.
- Is your leadership team prepared for multi-unit complexity?
If support lags behind growth, franchisees feel abandoned — and that’s when lawsuits and closures start.
3. Market Strategy and Territory Planning
Expansion isn’t just “more locations”; it’s smart locations.
- Is there clear demand in the new markets?
- Do you understand the competitive landscape?
- Are territories mapped to avoid cannibalization?
- Is there a data-driven model for site selection?
A franchisor should be able to say: “This market can support X units, and here’s the evidence.”
4. Financial Strength of the Franchisor
Growth costs money — even if franchisees pay the build-out.
- Do you have the capital to expand support, marketing, and technology?
- Can you absorb slower ramp-up periods?
- Is your cash flow strong enough to weather a few underperforming units?
Under-capitalized franchisors often grow fast… and collapse faster.
5. Quality of Franchisee Pipeline
More locations require more qualified owners — not just more buyers.
- Is your lead flow strong and consistent?
- Are you attracting the right profile of franchisee?
- Do you have a rigorous selection process?
Weak franchisee selection is the #1 cause of system-wide underperformance.
6. Brand Strength and Market Position
Expansion only works if the brand has momentum.
- Is brand awareness growing?
- Are customer reviews strong and consistent?
- Is the value proposition clear and differentiated?
If the brand isn’t compelling, new markets won’t embrace it.
7. Legal and Compliance Readiness
Growth increases regulatory complexity.
- Is your FDD updated and accurate?
- Are your state registrations current?
- Do you have strong compliance systems?
A franchisor must be legally buttoned-up before scaling.
8. Existing Franchisee Satisfaction
This is the canary in the coal mine.
- Are current franchisees profitable and happy?
- Would they buy another unit?
- Are they recommending the brand to others?
If your current franchisees aren’t thriving, expansion is premature.
9. Operational Scalability
Can the business model scale without breaking?
- Supply chain reliability
- Vendor capacity
- Training bandwidth
- Marketing systems
- Technology integrations
If any of these crack under pressure, expansion becomes a liability.
10. Strategic Purpose of Expansion
Finally, the “why” matters.
- Are you expanding to meet demand?
- To strengthen brand presence?
- To increase economies of scale?
- Or simply to grow revenue?
Remember, expansion should be strategic, not impulsive.
Connect with Evan Hackel
Evan Hackel, MBA, CFE (Certified Franchise Executive), is an author, speaker, consultant, and entrepreneur who has helped launch more than 20 businesses and led brand portfolios exceeding $5 billion in systemwide sales. He is President of the New England Franchise Association, creator of Ingaged Leadership, author of Ingaging Leadership: The Ultimate Edition, and CEO of Ingage Consulting.
To explore speaking, consulting, or franchise advisory support with Evan, visit www.evanhackel.com.
